Event: on August 22, the China weapons Electronic tendering and bidding Trading platform issued the announcement of the successful candidates for the procurement of sulfur recovery unit, acid water stripping unit and solvent regeneration unit (EPC) for the fine chemical and raw material engineering project of North Huajin United Petrochemical Co., Ltd., the company is the first winning candidate, and the bid price is 1.307 billion yuan.

The amount of the order to be awarded accounts for 50.1% of the revenue in 2022, and the engineering business continues to be prosperous. The bid-winning project of the company includes the general contract of sulfur recovery unit, acid water stripping unit and solvent regeneration unit, with a bid quotation of 1.307 billion yuan, accounting for 50.06% of the company's audited business income in 2022. Since 2021, the company's engineering design + general contracting business has grown rapidly, with an annual growth rate of 29.2% and 30.0% respectively in 2022. In 2022, the company's engineering design and general contracting business achieved a total revenue of 661 million yuan. We believe that with the promotion of the "Lu you Lu Lian" project and the continuous winning of major projects, the company's chemical engineering business will continue to be prosperous.

With the commissioning of the 5000 t / a high-end catalyst project, the catalyst profit is expected to increase. Qingdao Surekam, the company's holding subsidiary, has the world's leading low water-gas ratio sulfur-tolerant conversion technology, which can sell catalysts to foreign countries, and can also provide process packages, proprietary equipment and other technical services in the field of sulfur-tolerant transformation. The first phase of the company's 5000 tons / year high-end catalyst project has been completed and put into operation and reached production. We believe that it will bring a double boost to the company's revenue and gross profit margin, and the catalyst business profit is expected to increase higher than the same period last year.

Hydrogen energy, light and heat continue to advance, and the second growth curve is gradually clear. (1) hydrogen energy field: relying on its own rich experience in the refining and chemical industry, the company has made an in-depth layout in the field of industrial by-product hydrogen process technology. It has undertaken a number of general contracts or design projects in the field of hydrogen energy, such as China Petroleum & Chemical Corp Qingdao Refining and Chemical hydrogen Resource Base Project, Geer hydrogen Energy Science and Technology hydrogen Energy Utilization Project, Qilu hydrogen Energy Integration Project, etc., and cooperated with Dalian Chemical Institute to develop electrolytic hydrogen sulfide technology. (2) Photothermal field: we estimate that the annual investment in China's photothermal power station heat storage system may reach about 8.1 billion yuan, and the company will undertake China's first large-scale commercial photothermal power station EPC project as early as 2016, which is expected to fully benefit from the acceleration of domestic photothermal power station construction.

Investment suggestion and valuation: relying on the three major plates of engineering, chemical industry and catalyst, the company builds a sound basic plate, and at the same time actively extends to the high prosperity fields such as rare earth rubber, hydrogen energy, light and heat, and grabs the market opportunity by virtue of its core advantages. to support long-term improvement. It is estimated that the company's revenue from 2023 to 2025 will be 3.325 billion yuan, 4.1 billion yuan and 5.041 billion yuan respectively, with revenue growth rates of 27.4%, 23.3% and 23% respectively, and net profits of 369 million yuan, 534 million yuan and 711 million yuan respectively, with growth rates of 34.9%, 44.6% and 33.1% respectively.

Risk tips: raw material price fluctuation risk, production safety risk, hydrogen energy, photothermal projects are less than expected risks.